San Diego County Municipal Code § 22.405 Tax Imposed

A. Beginning January 1, 2023, there is imposed upon each person who is engaged in business as a cannabis business a cannabis business tax. Such tax is payable regardless of whether the person has been issued a commercial cannabis permit to operate lawfully in the unincorporated area of the County or is operating unlawfully. The County's acceptance of a cannabis business tax payment from a cannabis business operating illegally shall not constitute the County's approval or consent to such illegal operations.

B. The County Board of Supervisors may, by resolution or ordinance, increase or decrease the rate of the cannabis business tax, including the initial rate of cannabis business tax. The County Board of Supervisors may, by resolution or ordinance, increase or decrease the rate of the medicinal cannabis business tax, including the initial rate of the medicinal cannabis business tax, independent of other cannabis business tax activities. The County Board of Supervisors may set varied rates using classifications, sub-classifications, a tiered rate structure, graduated rates, or any other means not prohibited by law. Notwithstanding the foregoing, in no event shall the County Board of Supervisors repeal this tax or set any adjusted rate that exceeds the maximum rates calculated pursuant to this chapter.

C. The maximum rate of the cannabis business tax shall be calculated as follows:

1. For every person engaged in commercial cannabis cultivation in the unincorporated area of the County, the person shall be subject to an annual commercial cannabis business tax at the rates specified below in Section 22.405(C)(1)(a) or shall be subject to the annual maximum tax rate not to exceed three percent (3%) of gross receipts.

a. Through January 1, 2024, the annual maximum rate shall be:

i. Ten dollars ($10.00) per square foot of canopy space in a facility that uses exclusively artificial lighting.

ii. Seven dollars ($7.00) per square foot of canopy space in a facility that uses a combination of natural and supplemental lighting as defined in Section 22.404(Q) of this chapter.

iii. Four dollars ($4.00) per square foot of canopy space in a facility that uses no artificial lighting.

iv. Two dollars ($2.00) per square foot of canopy space for any nursery.

b. On January 1, 2024 and on each January 1, thereafter, the maximum annual tax rates specified in Section 22.405(C)(1)(a), shall increase by the percentage increase in the Consumer Price Index ("CPI") for consumers in the San Diego Metropolitan Area as published by the United States Government Bureau of Labor Statistics. However, no CPI adjustment resulting in a decrease of any tax imposed shall be made.

2. For every person engaged in the operation of a testing laboratory for cannabis, cannabis products, the person shall be subject to the maximum tax rate not to exceed two percent (2%) of gross receipts.

3. For every person engaged in retail sales of cannabis, cannabis products, including as a retailer (dispensary) or non-storefront retailer (retail delivery business), or microbusiness, the person shall be subject to the maximum tax rate not to exceed six percent (6%) of gross receipts.

4. For every person engaged in distribution of cannabis, cannabis products, the person shall be subject to the maximum tax rate not to exceed three percent (3%) of gross receipts.

5. For every person engaged in manufacturing or processing of cannabis, cannabis products, or any other type of cannabis business not described in Section 22.405 (C)(1), (2), (3), or (4) the person shall be subject to the maximum tax rate not to exceed four percent (4%) of gross receipts.

D. Persons subject to the cannabis business tax shall register with the County and if applicable pay the registration fee adopted by resolution or ordinance by the County Board of Supervisors pursuant to Section 22.406.

Pursuant to this Chapter, the following tax rates shall be in effect as of July 1, 2023:

(Added by Ord. No. 10838 (N.S.), effective 5-4-23)